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☆ Morning Bid: Get ready for the debt ceiling rally
▼ + stars: | 2023-05-18 | by ( ) www.reuters.com time to read: +3 min

A look at the day ahead in European and global markets from Kevin BucklandEuropean shares look poised to rally after a wave of optimism that a U.S. debt ceiling deal could be reached as soon as the weekend, which lifted stocks on Wall Street and in Asia. Analysts highlighted how both parties agreed to new, smaller teams to continue negotiations, which they took as a sign that discussions have moved to a more advanced stage. Cash available at the U.S. Treasury general account, used to pay for all official U.S. obligations, is draining fast as extraordinary measures are exhausted, pending a debt ceiling deal to raise the limit. The Nasdaq is on the cusp of a 13-month peak, and the Dax is hovering near its highest since January of last year. Reporting by Kevin Buckland; Editing by Edmund KlamannOur Standards: The Thomson Reuters Trust Principles.

☆ EU pushes forward with post-Brexit forum for EU, UK financial regulators
▼ + stars: | 2023-05-17 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

Britain's EU exit largely severed its financial sector's previously unfettered access to the bloc, raising concerns over London's role as a global financial centre. As part of Brexit terms, the EU agreed to formalise cooperation between financial watchdogs. The MoU will create a joint EU-UK Financial Regulatory Forum, similar to one the EU already has with the United States. Joanna Penn, treasury minister in the UK parliament's upper house, welcomed the "positive move" given how EU and UK financial markets are deeply interconnected. The EU has granted 'equivalence' or EU market access to derivatives clearing houses in London until the end of June 2025.

☆ EU states approve world's first comprehensive crypto rules
▼ + stars: | 2023-05-16 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

(Reuters) - European Union states on Tuesday gave the final nod to the world’s first comprehensive set of rules to regulate cryptoassets on Tuesday, piling pressure on countries such as Britain and the United States to play catch up. REUTERS/Dado Ruvic/IllustrationAn EU finance minister meeting in Brussels approved rules that were thrashed out with the European Parliament, which gave its approval in April. Regulating crypto has become more urgent for regulators after the collapse of crypto exchange FTX. Crypto firms say they want certainty in regulation, putting pressure on countries to copy the EU rules, and on regulators to come up with global norms for a cross-border activity. The United States has focused on using existing securities rules for enforcement action in the sector while it decides on whether to introduce bespoke new rules and who would apply them.

☆ Crypto should be regulated as gambling, UK lawmakers say
▼ + stars: | 2023-05-16 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, May 17 (Reuters) - Bitcoin , ether and other cryptocurrencies should be regulated as gambling given they are potentially used by fraudsters and pose significant risks to consumers, a panel of UK lawmakers said in a report on Wednesday. Britain is planning its first rules for cryptoassets, which currently only comply with anti-money laundering safeguards. Around 10% of UK adults hold or have held cryptoassets, according to official figures. The European Union approved the world's first set of comprehensive rules for crypto markets on Tuesday. The underlying technology used by cryptoassets has the potential to improve efficiency in payments, the report said.

☆ Banks call for scrapping UK share tax to boost City
▼ + stars: | 2023-05-16 | by ( ) www.reuters.com time to read: +1 min

LONDON, May 16 (Reuters) - Britain should scrap its tax on buying shares to increase London's attraction as a global financial centre as it faces fierce competition post-Brexit, banking body UK Finance said on Tuesday. Britain is reforming its financial sector following Brexit, which has fuelled concerns over London's ability to attract top company listings. "In the short-term, the 0.5% stamp duty currently charged on share purchases should be removed to reduce the cost of investing and help wider participation," UK Finance Chief Executive David Postings told an event. UK Finance launched a report which made recommendations on how to help the "pre-eminent" financial sector face tough global competition. The recommendations will feed into a broader report being compiled by the UK Capital Markets Industry Taskforce, due in the autumn.

☆ Global securities watchdog to propose rules for cryptoassets
▼ + stars: | 2023-05-16 | by ( ) www.reuters.com time to read: +2 min

LONDON, May 16 (Reuters) - Global regulators will shortly propose the first set of international rules for cryptoassets, including how existing norms could apply to the sector, a top regulator said on Tuesday. The European Union on Tuesday approved a first set of comprehensive rules, a step firms said would attract them to set up shop in the bloc. "Once finalised the recommendations will deliver a first globally coordinated set of rules for crypto-assets," Jean-Paul Servais, chair of global securities regulatory body IOSCO told an event held by the Managed Funds Association in Paris. IOSCO members, such as the U.S. Securities and Exchange Commission, Japan's Financial Services Authority and regulators in Britain, Germany and France commit to applying the body's recommendations. Servais, who also chairs Belgium's securities watchdog, also said that private finance will be a new priority for IOSCO's work this year.

☆ UK financial sector to forge new post-Brexit market model
▼ + stars: | 2023-05-15 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, May 15 (Reuters) - Britain's financial services industry has commissioned a report to lay out what needs to be done to keep London a globally competitive financial centre, which it said would span law and regulation, market practice and cultural change. Sector body the Capital Markets Industry Taskforce (CMIT), which commissioned the report, said it aims to ensure that Britain remains a leading global financial centre that supports the development of high-growth UK and international companies. "It will be a comprehensive, concise, and easily understandable report that sets out the new market model needed to help deliver growth across the broader UK economy," CMIT said in a statement. Britain has already undertaken more than 30 public consultations on reforming listing and other financial rules, and is in the final stages of approving a draft financial services law to implement these so-called Edinburgh Reforms. Separately, top financial sector officials said in March they would present a "roadmap" in the autumn to "kickstart" London's role as a post-Brexit global financial centre by 2030 by offering a "vision" for the future.

☆ AMERICAS Debt cap tick-tock leaves eerie calm
▼ + stars: | 2023-05-12 | by ( ) www.reuters.com time to read: +4 min

The issue dominated much of the G7 finance chiefs meeting in Japan. Dimon claimed any technical default could cause financial panic and JPMorgan had convened a 'war room' internally to deal with the issue. "It's very unfortunate, it's time-consuming, hopefully it won't happen, but it affects contracts, collateral, clearing houses, clients," Dimon said. Chinese stocks underperformed, with the G7 meeting mulling restrictions on investment to the world's second-biggest economy. Bank of England chief economist Huw Pill speaksReuters GraphicsJobless claimsReuters GraphicsReuters GraphicsBy Mike Dolan, editing by Christina Fincher, <a href="mailto:mike.dolan@thomsonreuters.com" target="_blank">mike.dolan@thomsonreuters.com</a>.

☆ Bank of England poised to raise rates again to tackle stubborn inflation
▼ + stars: | 2023-05-10 | by ( William Schomberg | ) www.reuters.com time to read: +4 min

Investors are fully pricing in another quarter-of-a-percentage point increase in Bank Rate, taking the BoE's benchmark rate to 4.5%, when the Monetary Policy Committee (MPC) announces the outcome of its May policy meeting at 12 p.m. (1100 GMT). Markets' main focus will be any signals from the BoE about the likelihood of further rises in the months ahead. "We expect that the Bank will only start to reduce rates from 2024 Q2 given resilient growth momentum," Goldman Sachs economist James Moberly told clients this week. "We have to be very alert to any signs of persistent inflationary pressures," Bailey said on March 27, before the latest round of data showed inflation fell less than expected. Last week, the U.S. Federal Reserve and the European Central Bank both raised their benchmark borrowing rates by 25 basis points.

To revive its fortunes, the government late last year published its Edinburgh Reforms agenda comprising over 30 proposed changes to existing rules. "There are a variety of factors that keep somewhere attractive in terms of investment, listing and being an international finance centre." "We want the UK to be the world's most innovative and competitive global financial centre," the spokesperson added. CHALLENGING ASSUMPTIONSSupporters of a more vibrant UK stock market are also increasing pressure on bankers managing IPO processes to challenge assumptions about London's poorer liquidity or post-IPO performance, relative to rival venues. Proposed changes to UK listings are encouraging, but may not be enough, said Steve Bates, BIA CEO.

☆ Crypto firms call for global consensus instead of "fire hose" of rules
▼ + stars: | 2023-05-10 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

Apart from compliance with rules to stop money laundering and terrorist financing, crypto firms are largely unregulated in many parts of the world. "If we built a good regulatory regime, people would come. We are shooting ourselves in the foot by not having a regulatory regime in the U.S.," Peirce said. U.S. Congress needed to decide which regulatory body has authority over crypto, Peirce added. Global standards and harmonisation as much as possible are key, said Sarah Pritchard, executive director for supervision at Britain's Financial Conduct Authority.

☆ Inflation’s real benefits beat theoretical costs
▼ + stars: | 2023-05-05 | by ( Felix Martin | ) www.reuters.com time to read: +7 min

Yet economic theory has a remarkably hard time identifying the social costs imposed by a rising price level. A more serious charge is the uncertainty that rising prices introduce into financial planning. If the theoretical costs of inflation are elusive, the potential advantages it has to offer are more concrete. U.S. house prices, meanwhile, peaked last year at a full 45% higher in real terms than when Rogoff made his plea. In the end, the practical benefits of inflation will trump its theoretical costs.

☆ The Role of Misery In Mental Health Crises - The New York Times
▼ + stars: | 2023-05-05 | by ( Huw Green | ) www.nytimes.com time to read: +2 min

Psychiatry’s guiding paradigm is that some extremes of mood are sufficiently severe that they constitute illness. This argument isn’t restricted to questions about diagnoses; a version of it plays out across multiple mental-health-related debates. At first glance, these can look like separate discussions, but they tend to boil down to the same central questions: Is happiness always the goal of mental health treatment? Emotions run particularly high around medication, and the same questions arise in the field of psychotherapy. The intervention being debated in this case is slower moving, but clinicians still disagree about the fundamental purpose of the talking cure.

☆ Regional bank stocks could be a market afterthought in the week ahead
▼ + stars: | 2023-05-05 | by ( Scott Schnipper | ) www.cnbc.com time to read: +7 min

For the immediate economic and earnings and growth outlook, it almost seems irrelevant whether regional bank stocks rally, steady or sell off more next week. Regional banks were top of mind for investors this past week, as First Republic failed , the SPDR S & P Regional Banking ETF tumbled more than 10% — twice the five-day loss in the S & P 500 Energy Index, the hardest hit S & P sector — and lenders such as PacWest Bancorp and Western Alliance Bancorp lost billions in market value. And, for all that, the S & P 500 only fell about 0.75% this week. Now the conventional wisdom on Wall Street is that regardless of how the regional bank stocks trade, it's a given that bank lending officers are going to pull in their horns and risk management desks will grow more risk averse. But stocks still face a host of issues, none of which are going away next week.

☆ UK Conservatives suffering 'terrible' night with local election losses
▼ + stars: | 2023-05-05 | by ( Andrew Macaskill | ) www.reuters.com time to read: +4 min

REUTERS/Peter CziborraLONDON, May 5 (Reuters) - British Prime Minister Rishi Sunak's Conservatives were facing a bleak set of local election results with voters punishing his party over political scandals, sluggish economic growth and high inflation, early results showed on Friday. The Conservative Party suffered a net loss of 144 seats on local councils that were up for re-election, the early results showed. Johnny Mercer, a member of parliament for the area, said it had been a "terrible" night for the Conservatives. The Labour leader Keir Starmer visited Plymouth and Stoke-on-Trent during local election campaigning as the party threw resources into winning back control of the councils. The last time most of these local election seats were contested was in 2019 when the Conservatives lost more 1,300 seats, shortly before the then prime minister Theresa May was forced to resign, which had been expected to help limit the losses in these elections.

☆ Ending the retailers’ crisis has a high price tag
▼ + stars: | 2023-05-02 | by ( Aimee Donnellan | ) www.reuters.com time to read: +5 min

BARCELONA, May 2 (Reuters Breakingviews) - High-street retailers are facing a heavy bill to weather the cost-of-living crisis. The cost of heating stores and staff requests for pay rises are squeezing operating margins at top players like H&M (HMb.ST) and Next (NXT.L). Shrinking disposable income is making it hard for these retailers to boost sales to protect margins. Most bricks-and-mortar retailers trade on higher multiples than they did before the war in Ukraine sparked soaring inflation. But that leaves a squeezed middle of retailers like H&M exposed to the brunt of the retail crisis.

☆ Bank of England policymakers consider 12th straight rate hike
▼ + stars: | 2023-05-02 | by ( ) www.reuters.com time to read: +3 min

LONDON, May 2 (Reuters) - The Bank of England is weighing up whether to raise interest rates for the 12th meeting in a row next week as it continues to grapple with an inflation rate that remains above 10%, higher than in any other big, rich economy. Following is a summary of recent comments by members of the Monetary Policy Committee. If they become evident, further monetary tightening would be required. JON CUNLIFFE, DEPUTY GOVERNORHas not commented on monetary policy in recent months. MPC MEMBERS WHO VOTED IN MARCH TO STOP RAISING RATESSILVANA TENREYRO, EXTERNAL MPC MEMBERApril 14: "We need to be patient (to see the effects of past rate increases).

☆ Moribund euro zone, Amazon outlook dent stocks ahead of rate meetings
▼ + stars: | 2023-04-28 | by ( Huw Jones | ) www.reuters.com time to read: +4 min

Oil was firmer but still heading for another monthly decline after disappointing U.S. economic data and uncertainty over interest rates. The yen fell to a nine-year low against the euro after the Bank of Japan left its ultra-easy monetary policy unchanged. The euro zone grew only marginally in the first three months of 2023, and at a rate lower than market expectations, sending the euro lower. "Futures are saying interest rates will be lower than Fed Funds by year end, indicating a decline. Markets are pricing in an 85% chance of the Fed raising rates by 25 basis points, the CME FedWatch tool showed.

☆ EU executive softens commission curbs for financial products
▼ + stars: | 2023-04-27 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

EU financial services chief Mairead McGuinness is due to include the curbs in draft legislation to encourage more retail investors to buy and sell shares. McGuinness said in January that a potential ban on commission or "inducements" paid by banks and insurers to financial advisers could be part of a wider shake-up to end conflicts of interest in retail financial services. Retail investors are rarely offered the least expensive products, though these can often perform as well as the more expensive ones, McGuinness said. Safeguards should also be strengthened around when inducements may be paid and when they must not be, she added. EU states and European Parliament would have final say on McGuinness' proposals.

☆ LSEG affirms 2023 targets, seeks shareholder nod for buyback
▼ + stars: | 2023-04-27 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

April 27 (Reuters) - London Stock Exchange Group (LSEG.L) on Thursday reaffirmed financial targets for the year before it seeks shareholder approval for a previously announced buyback of shares from the Blackstone/Thomson Reuters (TRI.TO) consortium. LSEG bought data and analytics company Refinitiv for $27 billion from the consortium in January 2021. LSEG said that first-quarter income from data and analytics rose 14.6% year on year to 1.3 billion pounds. Total income excluding recoveries rose 14.6% to 2 billion pounds, 1% ahead of consensus according to Jefferies research. "In data & analytics, we saw a further acceleration in annual subscription value (ASV) growth, reflecting the investments we have made in our services and stronger customer engagement," Schwimmer said.

☆ Bank of England tells insurers to moderate their push into pensions
▼ + stars: | 2023-04-27 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, April 27 (Reuters) - The Bank of England warned insurers on Thursday not over extend themselves in grabbing more business from pension schemes eager to offload risks. Charlotte Gerken, executive director for insurance supervision at the Bank, said that in the face of considerable temptation to capture business opportunities, insurers need to exercise caution. Bulk purchase annuities (BPA) are long-term policies from life insurers for company defined benefit, or final salary, pension schemes. UK life insurers could take on more than 500 billion pounds ($623.70 billion) of pension liabilities over the coming decade, she said. "Insurers therefore need to understand, as they take on these vast sums of assets and liabilities, how they may become greater sources or amplifiers of liquidity risk," Gerken said.

☆ US subsidies make UK financial reform urgent, business warns
▼ + stars: | 2023-04-26 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, April 26 (Reuters) - U.S. clean technology subsidies are sucking capital from Europe, making it more urgent to improve London as a global financial centre, business bosses told UK lawmakers on Wednesday. It's the biggest shift in competitive dynamic in my career," GlaxoSmithKline chair Jonathan Symonds told a Treasury Select Committee hearing on why UK companies are listing in New York instead. "The effect of what's happening through the Inflation Reduction Act across the whole of Europe is like a dirty great hoover on full suction mode," said Jonathan Hill, who authored a government-backed report on reforming UK listing rules. Britain has already eased listing rules in line with Hill's recommendations, and plans further changes. UK listed companies disclose whether they follow governance best practice or explain why they do not, but critics say flexibility has been lost.

☆ Brits need to accept they are now poorer, Bank of England chief economist says
▼ + stars: | 2023-04-26 | by ( Jenni Reid | ) www.cnbc.com time to read: +2 min

LONDON — Companies and workers are trying to pass the impact of inflation onto each other — and that risks persistent inflation, according to Huw Pill, the Bank of England's chief economist. "What we're facing now is that reluctance to accept that yes we're all worse off, we all have to take our share," Pill said on an episode of Columbia Law School and the Millstein Center's "Beyond Unprecedented" podcast, released on Tuesday. That has been followed by adverse weather and an outbreak of avian flu driving up food prices. The U.K. imports nearly half its food. "If what you're buying has gone up a lot relative to what you're selling, you're going to be worse off," Pill said.

☆ Crypto must end anonymity for illicit finance, U.S. regulator says
▼ + stars: | 2023-04-25 | by ( Huw Jones | ) www.reuters.com time to read: +2 min

LONDON, April 25 (Reuters) - Anonymity is allowing crypto assets to finance illegal activities, a top U.S. regulatory official said on Tuesday, posing national security risks that must be addressed. "It's essential for governments and particularly the industry to address that which makes crypto so attractive to illicit finance, and that is the allure of anonymity," she said. Legally compliant crypto companies should not be using "mixers" or software tools that effectively anonymise users by pooling and scrambling cryptocurrencies from thousands of addresses. Compliant crypto companies must show they have internal controls to prevent money laundering and terrorist financing. "It's possible for all crypto companies to distance themselves from mixers and anonymity enhancing technology while still providing customers financial privacy," Romero said.

LONDON, April 24 (Reuters) - Issuing "catastrophe bonds" and setting up public-private partnerships could help plug the "insurance gap" to better cover damage from climate change, a discussion paper from the European Central Bank and European Union insurance regulators said on Monday. Only a quarter of EU climate-related catastrophe losses are insured, creating risks to the economy and financial stability from uninsured households and businesses not being able to recover quickly from extreme events like fire or flood, the paper from the ECB and EU insurance watchdog EIOPA said. Without action, the insurance gap could widen as more frequent and intense events lead to higher premiums, and impact credit supply from banks in high risk areas. Direct aggregate catastrophe losses in the EU totaled 487 billion euros ($535 billion) between 1980 and 2020, and insurer Swiss Re has estimated there were $120 billion of catastrophe losses globally last year. Actions could include incentivising people and businesses to mitigate against climate-related disasters by offering discounts on policies, the paper said.

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